- Dynamic business development continues in the third quarter
- Net profit increases 19.9% in the nine-month period
- Company further reinforces its solid equity base
Baden-Baden, October 27, 2017: The GRENKE Consolidated Group’s dynamic business development continued in the third quarter of 2017. In the first nine months, net profit increased by a pleasing 19.9% year-on-year to EUR 91.0 million compared to EUR 75.9 million in the prior year. The Consolidated Group was able to achieve a significantly lower increase in expenses compared with high overall income growth. This is particularly evident when looking at the cost / income ratio, which improved again over the previous year. After the 1:3 stock split, earnings per share increased to EUR 2.01 compared to a level of EUR 1.68 in the prior year.
"We are very pleased with our business performance in the first nine months. Our growth trend is continuing, and we are heading towards another record year with an increase in net profit of close to 20%. This gives us tremendous confidence that we will achieve our targets for the current fiscal year," said Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG, in his comments on the Consolidated Group’s successful performance.
Net interest income in the nine-month period increased by 13.1% to EUR 182.2 million compared to a level of EUR 161.1 million in the previous year. Not only were expenses for the settlement of claims and risk provision unchanged versus the prior year, but the Consolidated Group’s loss rate also improved from 1.2% in the previous year to 1.0% in the nine-month period. As a result, net interest income after settlement of claims and risk provision rose 18.1% to EUR 141.5 million after EUR 119.9 million in the previous year.
Profit from service business and new business also developed positively. Based on high new business growth of 22.3% in the nine-month period of 2017, profit from service business increased 18.1%, and profit from new business rose 12.7%. Taking into account losses from disposals in the nine-month period, the GRENKE Consolidated Group’s income from operating business rose 15.0%, reaching a level of EUR 235.3 million compared to EUR 204.7 million in the same period of the previous year.
As the Consolidated Group’s largest expense item, staff costs increased by 20.8% in the first nine months. This increase followed a renewed rise in the number of employees from an average of 1,011 as per September 30, 2016 to 1,202 as per the reporting date. Selling and administrative expenses overall declined again by 3.8% despite a growth-related rise in operating, administration and selling costs.
The Consolidated Group’s balance sheet structure as per September 30, 2017 was solid as usual with total assets registering a rise of 18.2% to EUR 4.7 billion compared to their level as per December 31, 2016. "Our equity base remained strong as per the end of the third quarter. The equity ratio rose from 17.4% as per the end of the 2016 fiscal year to 17.6%, strengthening further after the issue of another hybrid bond in September. With our strong equity base, we are optimally positioned for our future growth," said Sebastian Hirsch, member of the Board of Directors of GRENKE AG, in his comments on the Consolidated Group's balance sheet ratios.